London midday: Stocks fall after UK retail sales data misses forecasts

The FTSE 100 was under pressure on Thursday after official data showed UK retail sales fell more than expected in March.

UK retail sales dropped 1.3% in March compared with February, which was much steeper than the 0.1% forecast by economists, the Office for National Statistics said.

On the year, retail sales were up 2.7%, missing expectations for a 4.4% increase.

“Any number of factors could be to blame, from bad weather to poor employment figures, along with the reality that wage growth remains stagnant,” said Dennis de Jong, managing director at UFX.com.

“Consumers may also be nervous about an uncertain Brexit outcome, ensuring they keep a tight hold on their wallets. Mark Carney and his BoE colleagues will be hopeful that the pending arrival of summer will prompt the masses to hit the high street, and drive those numbers back up.”

Traders are now turning their attention to the European Central Bank’s policy decision at 1245 BST. The Governing Council is widely expected to keep key rates and its asset purchase programme unchanged, a month after announcing a raft of new measures to address prolonged low inflation and a stagnant economic recovery.

In March, the ECB surprised the market as it slashed its main interest rate by five basis points (bps) to 0.00% and increased quantitative easing (QE) by €20bn to €80bn per month. The ECB also cut the deposit facility rate by 10bps to -0.40% and the marginal lending facility rate to 0.25% from 0.30%.

“Despite the comprehensive package of easing, which was announced in March, the ECB is still under pressure to ease again as inflation expectations remain around a historically low level, while the effective euro has strengthened following the easing from the ECB,” said Danske Bank.

Governor Mario Draghi’s press conference at 1330 BST will be monitored closely for any clues on the ECB’s next move.

Meanwhile, oil prices gained as US government data showed weekly crude inventories rose less than expected. Crude inventories increased by 2.1m barrels to 538.6m last week, compared to analysts’ forecasts for a 2.4m gain, according to the Department of Energy.

Brent crude rose 0.28% to $45.93 per barrel and West Texas Intermediate increased 0.27% to $44.30 per barrel at 1127 BST.

In company news, Sky’s shares fell after the broadcaster reported a slowdown in the number of new TV customers in the three months to the end of March.

Acacia Mining jumped after it reported better first-quarter gold production than forecast and a 24% rise in earnings before interest tax, depreciation and amortisation to $66m that almost hit targets thanks to an increase in revenue and lower cash costs.

Pets at Home rallied after a year-end trading statement showed like-for-like sales growth increased in the fourth quarter, with profits for the full year expected to meet forecasts.

Anglo American dropped as it reiterated its full-year production guidance and reported lower first-quarter output for diamonds, iron ore and export coal, but higher output in platinum and nickel.

Market Movers

FTSE 100 (UKX) 6,362.37 -0.75%
FTSE 250 (MCX) 16,944.92 -0.43%
techMARK (TASX) 3,135.56 -0.78%

FTSE 100 - Risers

HSBC Holdings (HSBA) 471.60p 1.33%
Royal Bank of Scotland Group (RBS) 252.70p 1.28%
Prudential (PRU) 1,450.00p 0.94%
BP (BP.) 366.45p 0.77%
Lloyds Banking Group (LLOY) 68.17p 0.61%
BHP Billiton (BLT) 1,003.00p 0.60%
Tesco (TSCO) 183.00p 0.55%
Antofagasta (ANTO) 502.00p 0.40%
Barclays (BARC) 171.70p 0.32%
Kingfisher (KGF) 362.60p 0.30%

FTSE 100 - Fallers

Sky (SKY) 982.50p -4.43%
Mondi (MNDI) 1,300.00p -3.92%
BAE Systems (BA.) 491.40p -3.74%
Capita (CPI) 1,011.00p -3.62%
National Grid (NG.) 968.10p -3.29%
Ashtead Group (AHT) 834.50p -2.91%
Relx plc (REL) 1,262.00p -2.62%
Smith & Nephew (SN.) 1,140.00p -2.56%
Severn Trent (SVT) 2,164.00p -2.48%
Anglo American (AAL) 772.40p -2.47%

FTSE 250 - Risers

Virgin Money Holdings (UK) (VM.) 358.30p 5.01%
Acacia Mining (ACA) 335.00p 4.85%
Smiths Group (SMIN) 1,154.00p 4.15%
Rotork (ROR) 184.20p 3.48%
Senior (SNR) 231.00p 3.45%
Vedanta Resources (VED) 440.10p 2.83%
Pets at Home Group (PETS) 246.20p 2.71%
Weir Group (WEIR) 1,232.00p 2.24%
BGEO Group (BGEO) 2,158.00p 2.18%
Amec Foster Wheeler (AMFW) 508.50p 2.05%

FTSE 250 - Fallers

Hansteen Holdings (HSTN) 102.40p -3.40%
Moneysupermarket.com Group (MONY) 311.70p -3.32%
Petrofac Ltd. (PFC) 883.50p -3.23%
Man Group (EMG) 153.70p -2.84%
Pendragon (PDG) 34.24p -2.75%
Mitie Group (MTO) 268.60p -2.68%
Pennon Group (PNN) 787.50p -2.60%
Ocado Group (OCDO) 322.30p -2.54%
QinetiQ Group (QQ.) 217.80p -2.51%
Aggreko (AGK) 1,117.00p -2.45%